Hyundai Motors is the latest automaker to announce plans to develop its own semiconductor chips to reduce reliance on chipmakers, according to the company’s global COO, Jose Munoz.
As car sales declined during the pandemic, automakers suspended orders just as electronics makers began ramping up production and increasing the existing supply of chips, to meet increased demand for laptops and game consoles. When consumers started buying vehicles again, automakers faced a global semiconductor shortage that led most OEMs – with the exception of Tesla and Toyota – to slow production lines, resulting in resulted in lower car sales. With most OEMs also offering aggressive plans to go electric, the need for chips has never been greater. Besides Hyundai, Tesla and General Motors have announced plans to produce their own chips and cut out the middleman.
While Hyundai sales in the last quarter did not suffer too much, Munoz said the “toughest months” were August and September, according to Reuters. The South Korean automaker has had to temporarily shut down some factories this year, but Munoz said the worst was over with the chip shortage, citing massive investments from Intel to increase capacity.
Nonetheless, Munoz told reporters that Hyundai no longer wanted to be without supplies and needed to be more self-sufficient in space. He acknowledged that developing chips in-house would take a lot of time and investment, but it’s “something we’re working on,” most likely in conjunction with Hyundai Mobis, the company’s parts subsidiary.
“The ability to secure supply can be a hallmark of successful OEMs that survive industry disruption and consolidation,” Bob Leigh, senior director of commercial market development at Real-Time Innovations, told TechCrunch, a software design company. “OEMs are more likely to acquire and / or partner with companies that can secure supply. But, this shortage will push the industry to adopt new chip more economical technologies to produce. The chip manufacturers do not want to leave the legacy fries that automakers want.
Leigh also said that while many automakers are probably going in the same direction trying to own their own chip development, it’s not necessarily doable as they don’t have the expertise and he doesn’t think it will. will evolve.